The ACCA-sponsored research – which analysed the financial reporting of 21 PFI projects (eight roads and 13 hospitals) with annual costs of £210 million – revealed several difficulties when accounting for PFI contracts.
‘ACCA’s research raises serious questions about the accountability of PFI projects, in particular the ability of current accounting methods to provide adequate transparency,’ said Andy Wynne, head of public sector issues at ACCA.
‘A major issue is that PFI debts and assets are kept off the Government’s balance sheet. The NAO reports that the future value of PFI payments to which central government is committed is over £105 billion – around a third of the current level of Government debt.
‘Given this extensive commitment, PFI assets and liabilities should, in many cases, be included on the Government’s balance sheet.’
The ACCA says this makes it difficult to measure the financial performance of the contracts, which, in turn, creates problems for their monitoring and evaluation, and raises serious concerns about their public accountability.
According to reports in The Financial Times, the cost of delivering these projects may well lead to cuts in public services and/or tax rises.
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season
Baldwins Accountancy Group has continued investment in the north-east and appointed David Fish as a director in its corporate finance team
UK M&A activity bounced back strongly in July and August, according to analysis by the deals practice at PwC.
Smith & Williamson has added Jim Clark and Philip Marsden, of Marsden Clark Corporate Finance Limited, to its corporate finance team.